Hemp and hype

Monday

Hemp. Not since the ostrich farming fad of the 1990s has there been such hype in agriculture markets.

The usual factors in our complex economy will determine whether hemp will be a similar bust. But we can be certain that it will not live up to the promises made by many of its advocates.

In Kansas and elsewhere, hemp is being hailed as a miracle crop – a versatile product that can save lives, farms and rural communities.

The Kansas Legislature approved legal production of hemp during its 2018 session, and hemp also got the green light from Congress in the 2018 farm bill.

Already, enterprising entrepreneurs are taking farmers’ money, promising in exchange to teach them how to grow hemp.

It’s true that hemp has potential, in part because it has a variety of uses.

For example, it can be used to make clothing and rope. And cannabidiol, an extract generally called CBD, is touted as a cure for everything from cancer to acne, including anxiety and pain. Credible research shows that CBD could be useful in mitigating epileptic seizures, but there’s little evidence yet of other benefits. Further, there are no regulatory standards for ensuring the safety of the non-prescription products being sold, and no rules to ensure the levels of CBD touted are actually in the product.

It’s hard at this point to separate hucksterism from legitimate optimism.

Certainly, its use in textiles could grow substantially, especially if eco-conscious companies such as Patagonia push it as a means for consumers to express their environmental credentials.

Some see an expanding market for hemp seeds as a form of high-protein feed for livestock.

It’s just too early to determine whether the economics of various uses will work out.

For decades hemp was outlawed because of its close relationship to marijuana. But as states have loosened or eliminated bans on marijuana, so have they eased regulations on hemp.

As the Brookings Institution explained in a piece about the 2018 farm bill:

“… (H)emp is defined in the legislation as the cannabis plant (yes, the same one that produces marijuana) with one key difference: hemp cannot contain more than 0.3 percent of THC (the compound in the plant most commonly associated with getting a person high). In short, hemp can’t get you high.”

All kinds of cannabis plants “were effectively made illegal in 1937 under the Marihuana Tax Act and formally made illegal in 1970 under the Controlled Substances Act,” according to Brookings.

Now, farmers and other businesses will see if it’s still a viable crop, given the advances in synthetic fibers and other developments.

The evidence suggests it will be a niche crop – one of some importance to relatively few farmers.

Its appeal for farmers will also be limited because the farm bill includes mandates for licensing hemp growers and more paperwork to ensure that growers are complying with all federal regulations regarding cannabis.

However, businesses that process hemp products – textiles or oils – could enlarge the economic footprint of hemp in Kansas beyond the value of the crop grown by farmers.

The market for hemp is growing significantly. Grand View Research, a San Francisco based company, expects the global market for hemp products to grow from $3.9 billion in 2017 to about $10.6 billion in 2025.

That’s tremendous growth, but we ought to keep the numbers in perspective. The Kansas corn crop by itself surpassed $2 billion in 2017. And Iowa’s corn crop surpasses $10 billion in a good year. So a global market of $10 billion is – to mix farm metaphors – peanuts.

That’s why some consulting firms warn of possible oversupplies of hemp as advocates hype the wonders of the crop.

The numbers and uncertainties underscore the gambling nature that is inherent in farming. Gamblers and farmers both play the odds. The smart ones know there is no such thing as a miracle crop.

A native of Garden City, Julie Doll is a former journalist who has worked at newspapers in California, Indiana and New York, as well as across Kansas.

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